Nigel Evans
Main Page: Nigel Evans (Conservative - Ribble Valley)Department Debates - View all Nigel Evans's debates with the HM Treasury
(13 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Tyrie
I broadly agree with that. There is always a problem with measuring inflation—there is always a dispute about exactly how to capture it best—and we will never get it exactly right. I will not go into any further details now, but I agree with the core of what my hon. Friend has said.
Work on both the deficit reduction plan and the recovery plan have been firefighting to deal with our inheritance—less from the right hon. Member for Edinburgh South West than from his predecessor, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). Let me now deal with the third aspect of the growth strategy, which consists of policies to improve the long-run growth rate and long-run economic performance: what the policy wonks call supply-side reform. The coalition's inheritance needed attention in that regard as well.
A few days ago I made a number of proposals for supply-side reform in a pamphlet, and they seemed to make everyone very excited. The Government growth agenda set out in the spring was a start, but, as the Chancellor said in his party conference speech,
“We need to do more”.
In that pamphlet, in a personal capacity, I made a few suggestions. In a nutshell, we need to work much harder to produce a comprehensive strategy embracing tax, reform of the labour markets, financial regulation, energy policy, transport and competition policy. We have been firefighting so far, but now is the time to start developing that longer-term strategy.
It is worth bearing in mind that it took the Thatcher Administration the best part of four years to get round to doing much of this, and I realise that this type of policy is easy to talk about but difficult to deliver. What matters most is that the creative energies of small businesses in our constituencies are released to increase the long-run growth potential of the economy. That is a big reform job. We have to bear in mind all the time that it involves millions of people—small traders and people working in small businesses—and that it is they who will restore the economy to health, not Governments and not Parliament. We need to make it much easier for them. Let us consider just one area: taxation. The Treasury Committee has flagged up some of the—largely inherited—contradictions and inconsistencies in the tax system, and argues that further tax reforms should be based on a few simple and coherent principles: certainty, simplicity, stability and fairness. We are a long way from achieving that in our tax system and there is a lot still to do. Encouragingly, the Chancellor said he strongly supported tax simplification; he has made that point on a number of occasions and he has created the Office of Tax Simplification.
The Chancellor announced in his speech at last week’s Conservative party conference that he would push ahead with further labour market reforms, and he has mentioned that again today. Of even greater significance could be the Chancellor’s commitment not to push ahead of other European countries on carbon reduction targets. I and many other people have been arguing for that for a long time, all the way back to our deliberations on the Climate Change Act 2008. The rapid pace of carbon reduction will push up business costs and also provoke great controversy, for example in respect of wind farms. Therefore, the Government are right to think again about that policy. It is now crucial that the coming autumn statement gives a decisive push to measures for improving long-run economic performance. It is equally important that that is seen not as a programme for a year, but as a remorseless project for the long term.
For much of the last decade, politicians of both major parties talked as if the economy need no longer be the top priority. For it was an age of abundance: it seemed that we could concentrate on how to spend it and quality-of-life issues. We forgot that most politics is hot air unless the economy can afford to deliver on the promises made by politicians. The complacency about growth that infected both parties encouraged the irresponsible lending and borrowing of the last decade. The electorate have noticed that they were led up the garden path, most notably by the absurd claim that Governments could put an end to boom and bust—so my final point is a presentational one. Politicians and Parliament must demonstrate that the public’s No. 1 priority is also their own No. 1 priority. The electorate’s No. 1 priority at present is to protect their living standards and their children’s prospects.
Mr Deputy Speaker (Mr Nigel Evans)
I now have to announce the result of the deferred Division on the question relating to tribunals and inquiries. The Ayes were 309 and the Noes were 20, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
Mr George Mudie (Leeds East) (Lab)
I am delighted to see the Chancellor still in his place. Oh, he is just going. I have that effect on him. I think he has heard enough in the previous four speeches, three of which were by members of the Treasury Committee—its best members; the rest are coming now. The last four speeches were very thoughtful, in contrast with what happened when the two Front Benchers had a go at one another. The public must see that as the Chamber at its worst; it was described as vaudeville. That is not the fault of the individuals concerned; it is the way this place is.
Following on from the speeches of the Front Benchers were speeches from the former Chancellor, my right hon. Friend the Member for Edinburgh South West (Mr Darling); the Chairman of the Select Committee; the hon. Member for Dundee East (Stewart Hosie), who represents the seat in which I was born; and my good friend from the Treasury Committee, the hon. Member for Sevenoaks (Michael Fallon). They were very good speeches, but that contrasts with what we heard before them, which is sad, in a way.
Two kinds of people watch the parliamentary channel during the day. There are people who will find the Front-Bench speeches lovely, because they are party animals of either party, and they like the cut and thrust, but there are also 100,000-odd additional people who are, or could be, looking at that channel: those who, in the last year—in the last quarter or month—have lost their job. Almost a million youngsters between 16 and 24 are out of work; they could be watching that channel, hoping that they will see that action will be taken to get them a job. They will have been despairing, until the last four speeches.
The hon. Member for Sevenoaks said that he saw some common ground. I think that there is some, inasmuch as whatever the bluster, something is clear after 15 months: cutting the deficit at the speed first suggested, backed up by a lack of a coherent growth policy—there was no growth policy; a document was hatched and brought forward six months later as an autumn statement—meant that the people watching knew that we were going to have a hard time. This debate will be an achievement if there is any acceptance in the Chamber that we cannot do what we have been doing for the past 15 months, but must do something additional—something different—because what we have been doing is not working. There are signs of that. The fact that the Chancellor went to the Bank of England and asked for credit easing to be done through the Bank, which was refused, and the fact that he is now taking the steps to do it himself, is good—
Mr Deputy Speaker (Mr Nigel Evans)
Order. Will the hon. Gentleman please make his comments through the Chair?
Mr Mudie
Shall I start again, Mr Deputy Speaker? You have put me off. Can you remind me where I was?
The Chancellor was turned by the Governor, but he was treated very well by the House because he had spent half an hour saying that he would not spend money. He now has the job for the next two months, until the autumn statement, of making a reality of credit easing, which means that because the Governor will not do it from the Bank of England, it will have to be done by the Government through public expenditure. And that, from a man who was saying that there is too much public expenditure and the only way is to cut, is a major achievement and a major philosophical breakthrough.
There are clear signs that the Chancellor realises that he boxed himself in. It was described three or four months ago on a radio programme as flexibility—“I have flexibility in my programmes”. That would give him the ability to move off plan A, but it is now clear that he is moving off with a vengeance because he sees the danger. When we in the House speak about growth, that means a lot to politicians, but the ordinary person does not realise that it means their job, the security of their home and their income. If the Chancellor is moving on that, it is very good.
I shall put three suggestions on the table for the Chancellor. First, he could reconsider the disastrous decision to abolish regional development agencies and the disgraceful decision to give the local enterprise partnerships that he set up in their place less money, no staff, no powers, no authority and no influence. They have pulled together in every area in the country schemes that have been presented to Lord Heseltine to filter out and put forward for funding. As only one scheme has come from each area, there is a whole list of good schemes sitting on the table that could be put into operation.
Secondly, when we speak about infrastructure, we invariably go to roads. The key, however, is housing because it triggers so many additional jobs and so much additional expenditure. There is one thing the Chancellor could do without spending any money. I know there is a balance. An average two-bedroom house costs £160,000. To get a mortgage requires a deposit of £32,000. Need we look any further to understand why youngsters are not buying houses? I know we have to protect people from being irresponsible, but such a value-to-loan ratio has knocked house purchase off the table. As we are not building social housing, it is a real block. Perhaps the Chancellor could speak to the Financial Services Authority and to the banks and say, “Ease off and look at each case on its merits.”
Finally, during the 1980s recession we had some very good community programmes—youth training schemes and so on. They were sometimes derided but they kept youngsters at work and gave them some self-belief and purpose. Youngsters got up and turned up on time. The schemes prepared them for work and kept them intact as individuals. In Leeds we had 2,500 places and we did enormous work across the city with unemployed people who, to this day, pay tribute to the fact that such schemes kept them going when they would have disintegrated as personalities if they had not had that discipline and chance. I should like the Chancellor to think about those.
Mr Deputy Speaker (Mr Nigel Evans)
Order. This debate is very popular and I want to accommodate as many Members as I possibly can, so the time limit is being reduced to six minutes, with the usual injury time for two interventions.
Frank Dobson
I am not going to give way to anybody because it takes up time from everybody else’s speeches.
VAT has been increased, and that hits the worst-off most. There has also been what is, in effect, a tax increase on everybody who has to commute to work: the massive fare increases that have been pushed through, which are far above the rate of inflation. We have certainly seen inflation. One of the reasons why Governments quite like inflation is that if they borrow £1 and there is 5% inflation, they pay back 95p instead of £1. That is why the Government have not taken any notice of the problems caused by the rate of inflation, but it certainly hits people’s pensions and wages.
As for growth, there simply isn’t any. Growth is needed both in this country and worldwide. Growth was the theme of the London G20 summit. I know that it is very unfashionable to praise the former Prime Minister, Gordon Brown, but the fact is that at that summit, and in the run-up to it, he did more than anybody in the world to convince all the Governments that they had to start investing more in the world economy. I have heard from someone else that it is Sarkozy’s private view that Gordon Brown’s intellect and drive—
Mr Deputy Speaker (Mr Nigel Evans)
Order. The right hon. Gentleman should refer to the former Prime Minister by his constituency.
Frank Dobson
I am sorry, Mr Deputy Speaker. It is Sarkozy’s view that it was the intellect and drive of my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) that virtually saved the world from a total disastrous slump.
Since then, the new UK Government have joined the backsliders; they are not going for growth, either here or worldwide. They have let the bankers and speculators back in charge, blaming public spending everywhere in the world and blaming public services for what has gone wrong. This Government have been delighted to wheel on witnesses defending their policy, but I ask people to look at who these famous witnesses are. They are the bankers, the financiers and the speculators—the people who caused the worldwide problem in the first place.
About two days before its recent unfortunate fraud case, a very distinguished person from UBS said that we needed austerity for all and then everything would be okay. Unfortunately, the interviewer did not ask, “Are you one of the people who lost £44 billion in the crash?” A couple of days later, someone from Citigroup was advocating austerity for all. Unfortunately, the interviewer did not say, “You are from the company that lost £60 billion in the crash. Why should we take a shred of notice of someone with your track record?” Then, my favourite, Ernst and Young, said that we needed austerity for all, but never mentioned being the auditors of Lehman Brothers. One would think that a period of silence—a decade of silence—would have been appropriate.
Frankly, we have seen that the bankers, financiers and speculators have far too much power in this world. We have the Alice in Wonderland situation where the banks cause a recession; the Greek economy declines; the banks in effect charge the Greeks exorbitant rates of interest; the banks, who created the crisis, then threaten the ability of the Greeks to pay them back, meaning that the Greeks might default; and, if the Greeks default, the banks default. The banks start it off, and in the end might default—and what happens? They do not rely on the private sector or market forces. They come grovelling to taxpayers all over Europe to ask them to bail them out of their stupidity—for that is what their policies are. We hear about social security scroungers, but the worst social security scrounger in the world does not compare to the scrounging banks when they get things wrong.
Mr Deputy Speaker (Mr Nigel Evans)
Order. To assist in enabling a greater number of Members to take part in the debate, the time limit is reduced to five minutes.